its a conincidence cause in my economics class we were just talking about customs taxes and stuff like that.

I was wondering how do tennis players for say live in spain and win money in america pay their taxes. and how about americans won win a wimbledon or other european tourney pay their taxes. what about other players of other sports like soccer and ice hockey. does anyone know anything about how their money situation works

chad shaver

03-17-2004 12:35 PM

That's not even about prize money...it's about endorsements. That's a major load o' crap, IMO.

Ballmachine

03-17-2004 12:36 PM

This is a very complicated issue, but I will try to make it as simple as I can. If you are an American Citizen, then you have to pay taxes on all of your income, even income that is earned overseas. However, you often have to pay taxes to the country that you earned that income in as well. Therefore, there are many, many laws regarding foreign earned income tax credits, whereby you don't exactly pay taxes twice, because you do earn a credit for taxes that are paid outside of the U.S. This is similar to earning income in one state, but living in another. You still have to file taxes for both states, but you do receive a credit on the state that you live in for the taxes that you paid in the state that you work in. It is a very complicated issue, with many laws and exceptions. That is why accountants get paid big bucks to handle Expatriate and Foreign National income tax returns.

This is also why many tennis players try to claim Monte Carlo as their home, because they do not have to pay taxes there. The trouble with that, is that many of the players have homes in other countries at the same time, such as Boris Becker, and the government counts the actual days that you spent in each home to determine where your true residence lies. This is why Boris got into so much tax trouble over the years in Germany.

I hope this helps answer your questions.

Rabbit

03-17-2004 12:51 PM

The couple who used to own our company are in that situation. They got a boatload of money and for tax reasons have moved it offshore. It is very, very complicated.

From my view, Britan is making the same mistake that New York City did. New York City had a cash flow problem, and at the same time was one of the top convention centers in the US. They figured logically that they could tax the heck out of the tourist industry and get "free" revenue. What they didn't count on was everybody changing their venue from New York to other locations like Scottsdale Arizona. When they lowered their taxes, the tourists came back.

If England does this, they will reduce Wimbledon to a second rate event. John Lloyd, the one-time British number 1 and Davis Cupper, has already campaigned for Wimbledon to go to hard courts. He sees the demise in prestige that the tournament has with the younger players coming up. While I think hardcourts are a mistake, I do agree that Wimbledon is no where near the number one Grand Slam in the world any more. IMO, the French is probably the most prestigous. The US Open has an atmosphere that players either love or hate, and the ones who hate it (crowds and night matches) really hate it.

Bob Murray

03-17-2004 01:08 PM

It's not like Andre can't afford it. He'll still be fabulously wealthy whether he pays or not.

Fat Boy

03-17-2004 01:09 PM

Jeez, save your sympathy for those who deserve it, not a guy who probably earns more in a week than most of us do in a year.

If you earn money in a country, you pay income tax there. That's the rule in most all countries in the world. It looks like Agassi's accountants came up with some kind of tax avoidance scam to get him out of paying UK tax.

Tough sh1t that it didn't work.

Rabbit

03-17-2004 01:43 PM

The way I read it, it's not money Agassi earned in Great Britan. It's a share of endorsement money that Great Britan thinks they're entitled to while he was in England. In other words, the money is paid to Agassi from Head in Austria. Now, he might owe taxes in Austria and the US, but how does England figure he owes taxes there? I could understand if it was money he earned from tournament play, but endorsements outside of England?

polakosaur

03-17-2004 02:18 PM

so ballmachine your saying that if i'm an american citizen which i am, and i am also a polish citizen and i live in poland, i would pay my taxes to poland, and america would not get me unless i were to live there for a certain amount of time? and say i was to win a tournament in america, who would tax me?

chad shaver

03-17-2004 02:29 PM

Rabbit,

You are exactly right. It's not about money he wins/earns at their tourny (which he pays, anyway), it's about money that Head and Nike pay him to use their products, whether he plays in England or not. Based upon this premise, every sponsored player from outside the US who plays in our country should have to pay taxes based upon his endorsement contract, just for wearing certain clothes or using certain equipment.

Fat Boy, did you even read the article? It's not about sympathy, it's about what's right and wrong. Period. End of story.

pound cat

03-17-2004 04:14 PM

If a person owes money to a country which is legally entitled to money which that person owes , then that person has to pay money to that country.

Bob Murray

03-17-2004 04:29 PM

Chad, your whole argument is wrong. If you don't understand read what PC wrote. Its about obeying the taxation laws of a country usually different to our own.

RacquetDoctor

03-17-2004 04:57 PM

Read the article...sounds to me like GB is reaching. This ruling would mean that anyone receiving endorsement $$ would have to pony up if they played in their country...This opens up every tennis player, soccer player etc...

chad shaver

03-17-2004 05:44 PM

Well then , Bob and PC, I suggest that our IRS start sending bills for back taxes to a whole lot of athletes from a lot of different countries.

Rabbit

03-17-2004 07:39 PM

I understand obeying the laws of another country, when in Rome...

But, does this mean that if a normal citizen from the U.S. visits Great Britan they are subject to taxiation based on what they make in the U.S.? Certainly while Agassi is in GB he's making endorsement money, but how is that different than say me visiting Great Britan and being paid while on vacation? Would I owe taxes based on the vacation pay that I was receiving? Sounds to me like a scam...

The UK is not some banana republic extorting cash out of visitors. It has a complicated and sophisticated tax system, and the rights of the individual taxpayer against the state have been jealously guarded by the courts for 200 years.

The press story does not contain enough information for a sensible analysis. However, if you carry on a trade in the UK, which is what Agassi will have been doing, then you have to pay UK tax. If Head pay him for using their equipment in the UK, then that may count. Believe me, the court would have looked very closely at the facts and the law.

Rabbit, if you do some vacation work in the UK, you will be due to pay UK tax on your earnings (the first $8,000-odd are tax free). You will ot be liable to pay UK tax on your US income unless you are resident in the UK.

I could go on.... and on...

but I sense eyelids drooping across the globe..........

Cypo

03-18-2004 02:12 AM

If I were Agassi (or any player), I would certainly weigh in that playing Wimbeldon is going to cost be an additional 50,000 $ (or whatever) in taxes before I committed to playing there.

baseliner

03-18-2004 04:59 AM

Kind of scary for someone to look at the issue as one of soak the rich as in "he has enough let him pay". UK has a tax code evidently where if you are in that country they can tax you pro rata on what you earn elsewhere, i.e. if you make one million a week in endorsements year round from Head for example and you play Wimby and another grass court warm-up event for a total of 4 weeks in the country you owe taxes on 4 million based on time in the country, not based on what you earned in the country. They are going after AA because of deep pockets. The average tourist doesn't make enough to bother (or there is an alternate minimum before the tax kicks in--I'm not a UK tax expert).

Fat Boy

03-18-2004 05:11 AM

Not sure why I'm bothering to try and educate you dopes, but...

Agassi is paying tax on his UK earnings. Not on a fraction of his year round earnings across the world. He entered into a dodgy tax avoidance scheme. It failed.

US citizens who live in the USA do not pay UK tax, except on UK source income, like Wimbledon prize money. This is because they are not tax-resident in the UK, and not because they aren't as rich as Agassi.

In this respect the UK tax system is pretty well identical to all other countries in the world.

Except of course the USA, which uniquely taxes its citizens even if they do not live in the USA.

Rabbit

03-18-2004 05:49 AM

Fatboy - call me dense (and you probably will), but this appears to be taxation of income that is external of Great Britan. In this example, let's take the money he's paid from Nike. Nike is based in Oregon and they pay money to an American citizen. How then is England entitled to money earned not sourced in England?

In my vacation example I was referring to the money I would make while on vacation, not working in England on vacation. Likewise, Agassi has what I would assume is a term contract with Nike. If they don't pay him during the month he's in England, does he still owe taxes on his income?

If Agassi and Graf vacation in England, he is still getting endorsement money. Does he have to pay taxes on the money he earns while on vacation in England? If so, that could really translate to a very expensive vacation, especially if both are still under contract.

I also think it naive to think that any taxation is fair or equitable. In this country it's a redistribution of income, from the citizens of the US to the Congress. :shock: